We've been hearing terrible things about retail sales since October, and they've reached a frenzy during the holiday shopping season. One item in the San Francisco Chronicle today caught my eye:
"[holiday] retail sales were down 2 to 4 percent compared with last year...this holiday season...will probably go down as one of the worst in decades."
Of course the data was buried in the middle of the article, while the "bad news" was in the second sentence.
So what's the real story? This chart shows total and per capita retail sales in the United States, adjusted for inflation. I assumed a 3% drop in gross receipts from 2007 to 2008.
That's hardly the worst season in decades - even after the media has badgered us for months about declining consumer confidence and reduced spending, per capita spending is still at the same level it was in December 1999, when consumer confidence was at an all-time high.